Marketing mix in tourism the case of Go Asia Travel

VIETNAM NATIONAL UNIVERSITY, HANOI
SCHOOL OF BUSINESS



Nguyen Dac Quy


MARKETING MIX IN TOURISM THE CASE OF GO ASIA TRAVEL



MASTER OF BUSINESS ADMINISTRATION THESIS







Hanoi - 2011
VIETNAM NATIONAL UNIVERSITY, HANOI
SCHOOL OF BUSINESS



Nguyen Dac Quy

MARKETING MIX IN TOURISM THE CASE OF GO ASIA TRAVEL

Major: Business Administration
Code: 603405

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisor: Dr. Pham Quy Long
Dr. Nguyen Thi Phi Nga



Hanoi - 2011
vi

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i
ABSTRACT ii
TÓM TẮT iv
TABLE OF CONTENTS vi
LIST OF FIGURES ix
LIST OF TABLE x
LIST OF ABBREVIATIONS xi
INTRODUCTION 1
Significance of The Thesis 1
Literature Review 2
Objective of The Study 3
Scope of the Study 3
Data Sources and Research Methodology 3
Contribution of The Study 4
Structure of The Study 4

CHAPTER 1: THEORY BACKGROUND OF MARKETING AND MARKETING
MIX IN TOURISM 5
1.1 CONCEPT OF MARKETING 5
1.2 CONCEPT OF MARKETING IN THE SERVICE IN DUSTRY 6
1.2.1 Product: 8
1.2.2 Pricing: 11
1.2.3 Promotion: 13
1.2.4 Place 17
1.2.5 People 19
1.2.6 Process 20
1.2.7 Physical Evidence 21
1.3 CONCEPT OF TOURISM 21
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1.4 CHARACTERISTICS OF TOURISM PRODUCTS 22
1.4.1 Inflexibility 22
1.4.2 Inventory / Perish ability 22
1.4.3 Inconsistency 23
1.4.4 Intangibility 23
1.4.5 Seasonality: peaks and troughs in demand 24
1.4.6 High fixed costs of service operations 24
1.4.7 Interdependence or inseparability of tourism products: 25
1.5 MARKETING MIX FOR TOURISM INDUSTRY 26
1.5.1 Products 26
1.5.2 Pricing 26
1.5.3 Promotion 27
1.5.4 Place 27
1.5.5 People 27
1.5.6 Process 27
1.5.7 Physical Evidence 28

1.6 ANALYZING TOOLS USED IN THIS THESIS 28
1.6.1 External environment analysis: 28
1.6.2 Internal and external environment analysis: 31
1.6.3 Interview and questionnaire 33
CHAPTER 2: MARKETING MIX IN GO ASIA TRAVEL COMPANY
ANALYSIS 36
2.1 Introduction of Go Asia Travel Company 36
2.1.1 Overview of Go Asia Travel Company 36
2.1.2 Company Organization Chart 37
2.1.3 Products of Go Asia Travel Company 37
2.2 The factors influence on Marketing Activities of the company 38
2.2.1 Customer 38
2.2.2 Competitors 40
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2.2.3. Partnership 44
2.3 Marketing mix decisions of GAT travel 45
2.3.1 Product: 45
2.3.2 Price 52
2.3.3 Promotion 54
2.3.4 Places 59
2.3.5 People 61
2.3.6 Process 63
2.3.7 Physical evidence 64
2.4 Assessment of GAT‘ marketing activities 66
2.4.1 Positive Sides 66
2.4.2 Negative Sides 67
CHAPTER 3: RECOMMENDATION TO GO ASIA TRAVEL 69
3.1 Philosophy of GAT 69
3.2 Solutions to improve the effectiveness of marketing activities in GAT 70

REFERENCES 80
APPENDIX 82









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LIST OF FIGURES


Figure 1.1: Marketing mix 7P 8
Figure 1.2: The element of the communication process 13
Figure 1.3: The element of the promotion mix 14
Figure 1.4: PEST Model 28
Figure 1.5: SWOT model 31
Figure 2.1: Company Organization Chart 37
Figure 3.1: Marketing mix 4Ps Error! Bookmark not defined.

x

LIST OF TABLE


Table 1.1: Statistics of foreign tourists to Vietnam before and after WTO Event 30
Table 2.1: Competition Analysis 42
Table 2.2: Rate policy for Halong bay one day tour 54
Table 2.3: Rate of Alova Cruise on Opening Promotion 55
Table 2.4: Six steps to handling with complaints. 64
Table 2.5: Specifications of Alova Halong Cruise 65

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LIST OF ABBREVIATIONS

No
Abbreviations
Stand for
1
WTO
World Trade Organization
2
No
Number
3
GDP
Gross Domestic Product
4
SPT
South Pacific Travel
5
APT
Asia pacific International Travel
6
VLT
Viet long Travel
7
GAT
Go Asia Travel

8
FIT
Free Independent Travelers
9
GIT
Group Inclusive Travelers
10
ITF
International Travel Firm
11
FAM Trip
Familiarization trip
12
SEO
Search Engine Optimization
13
SEM
Search Engine Marketing
14
HR
Human Resources


1

INTRODUCTION
Significance of The Thesis
People say that ―Marketing is the art of selling goods and services‖. And to have a
good marketing strategy, company need to analyze themselves, competitor and the
market. Besides some strategic decisions like positioning, market segmentation,

marketing objective… a marketing manager always has to focus on 7 tactical
decisions. In my viewpoint, marketing mix is key and handbook to obtain the
success in business and to be an active and practical approach.
Marketing mix shows that we should choose the first thing is product which need to
be met the customer need and be controlled in quality (Product); answer the
question how much we will sell this product, the price need to be high or low, how
many factors which influence on the pricing (Price). The third question is how to
bring our product to all the potential customers, how to be a famous product, how to
engage the customers in communication (Promotion). You have a good product at
good price; many people know about you but do they feel easy and convenient to
buy it (Place), and there more decisions we have make are people, process and
physical evidence.
In almost travel companies in Vietnam, they do not have a professional marketing
plan for starting a company or a product. They do not implement full parts of
marketing mix some of them under evaluate the role of product or over evaluate the
role of advertising…
So many companies in Vietnam have not separated marketing from the sales and
marketing department.
Whereas, more and more foreign competitors with the position of multi-sided
strength, financial, profession especially they are the master of marketing. They
have enough strategies, tactics and the resources to win the global market.
Currently, Vietnamese travel company still have some advantage in the local way
but under the roadmap of WTO joining and the quick internet development, they
have to survive with the extremely difficult market, encounter with the giant
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competitors. Everything is changing very quickly, Go asia Travel and the other have
to obtain the knowledge of marketing especially marketing mix with 7 practical
decisions. It is, therefore, very necessary to conduct a study on Marketing Mix in
Tourism, using the case of Go Asia Travel to analyze and understand more,

In the physical product field, marketing mix includes Product, Price, Place and
Promotion. In the services field, marketing mix is expanded with 3 additional
elements: People, Process and Physical evidence.
In this thesis, I would study about marketing mix in tourism industry and figure out
some recommendations for Go Asia Travel.
The study aims to gain the following significances:
1. Theoretical aspect: contribute some recommendation to concept of marketing
mix in tourism industry.
2. Practical aspect: Apply theories on marketing mix in the case of Go Asia
Travel

Literature Review
Relating to this topic, there are some authors mentioned about this. For example, the
book of ―Marketing in Travel and Tourism‖ by Victor Middleton, Alan Fyall and
Michael Morgan. In this book, the author also write about marketing mix in tourism
service for a chapter (chapter 8 – page 136). This chapter describes all 7 Ps tactics
in specific tourism services. It also mentions marketing mix in the context of
marketing system.
The second book which talks about marketing mix is ―The portable MBA in
marketing‖ by Charles Schewe and Alexander Hiam. In this book, the author use
whole 1 part (part, page from 337-509) to write about applying marketing mix
tactics including creating a product, manage product, pricing method, distribution
function and how to promote sales.
Before and during the time of making this research, I have not seen any research
with the particular topic of marketing mix in tourism and with the case of Go Asia
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Travel Company. Therefore, we can conclude that my research is not coincided
with others.

Objective of The Study
To do this research, the author tries to reach the following objectives:
1. Review theories on Marketing mix and Marketing mix in tourism industry.
2. Apply theories on marketing mix into the practice of Go Asia Travel.
3. Contribute some recommendations about marketing mix to Go Asia Travel.
Scope of the Study
Scope of study is limited in following time, place and work:
Time: Study about Marketing mix in Go Asia Travel from 11/2010 to 10/2011, and
some recommendations for next 5 years.
Place: The research is conducted in Hanoi and on the internet only.
Work: Marketing mix for Go Asia Travel only, for the products serving foreign
customers only (inbound customers).

Data Sources and Research Methodology
1. Data sources and processing
The information used in this thesis is primary and secondary ones. Primary
information is collected through surveys, interviews, discussion and questionnaires.
Secondary information is collected directly from Go Asia Travel and some other
travel companies. Information also collected from some books, websites, academic
newspapers and marketing plan when available.
Based on the collected information and marketing mix theory, I analyze them and
then give out the evaluation and the best practice for Go Asia Travel.
4

2. Research methodology
1. Research method: Qualitative/ case study
2. Research design: Case study
3. Analysis: Descriptive analysis

Contribution of The Study

This study aims to contribute some recommendations to Go Asia Travel in the
aspect of Marketing. This is the first study which researches on this company so it
may become the reference for the next researcher with the same objects. It can be
the reference for who wants to make a study on Marketing Mix in Tourism industry.

Structure of The Study
Apart from Acknowledgement, abstract, list of abbreviation, list of table,
introduction, conclusion, reference, and appendix, the thesis is divided into 3
chapters:
Chapter 1: Theory background of Marketing in Tourism
Chapter 2: Marketing Mix in Go Asia Travel Company Analysis
Chapter 3: Solutions to improve the effectiveness of marketing mix for the Go
Asia Travel Company






5

CHAPTER 1: THEORY BACKGROUND OF MARKETING AND
MARKETING MIX IN TOURISM

1.1 CONCEPT OF MARKETING
There are many different concepts of marketing which change by each period, each
scholars. I would indicate here some of them:
 Marketing is the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods and services to create exchanges (with
customers) that satisfy individual and organizational objectives by American

marketing Association.
 The Chartered Institute of Marketing defines marketing as "the management
process responsible for identifying, anticipating and satisfying customer
requirements profitably.
 Marketing is the set of human activities directed at facilitating and
consummating exchanges by Marketing Management, 2nd edn, 1972 - Prof. Philip
Kotler.
 Marketing decisions generally fall into the following four controllable
categories: Product, Price, Place (distribution) and Promotion. The term "marketing
mix" became popularized after Neil H. Borden published his 1964 article. E. Jerome
McCarthy later Summarized into the four categories that today are known as the 4
P's of marketing.
For a managerial definition, marketing has often been described as ―the art of
selling products‖, but people surprised when they hear that the most important part
of marketing is not selling. Selling is only the tip of marketing iceberg.
By Peter Ducker, a leading management theorist said that:
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―The aim of marketing is to make selling superfluous. The aim of marketing is to
know and understand the customer so well that product and service fit him and sell
itself. Ideally, Marketing should result in a customer who is ready to buy‖.
In this thesis, I will use the first concept to develop my topic. For service marketing
I will understand that: Marketing is the process of planning and executing the
conception, pricing, promotion, distribution, people, process and physical evidence
of ideas, goods and services to create exchanges (with customers) that satisfy
individual and organizational objectives.
In the tourism field, I suppose that: Things to do of a marketing manager are to
make 7 decisions: Product, Price, Promotion, place, People, Process and Physical
evidence which can help find customers, satisfy them and get profits for an
enterprise.

1.2 CONCEPT OF MARKETING IN THE SERVICE IN DUSTRY
The key concept of Marketing in service industry is people and customer‘
relationship factors. The reason is that, not like physical goods, service is intangible
and need participation of both customers and producers. The service marketing is
also known as an extended marketing mix and is an integral part of a service
blueprint design. The service marketing consists of 7 P‘s as compared to the 4 P‘s
of a product marketing mix. Simply said, the service marketing assumes the service
as a product itself. However, it adds 3 more P‘s which are required for optimum
service delivery.
The product marketing mix consists of the 4 P‘s which are Product, Pricing,
Promotion and Place.
The service marketing places 3 further P which includes People, Process and
Physical evidence.

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In the tourism marketing mix, I would like to mentioned here 3 more Ps
(Partnership, Programming, Packaging) which indicated by Alastair Morrison
The additional Ps will be:
Partnership: as mentioned in part 2.2 the factors influence on marketing activities
of the company, we can see that Partnership is very important factor which affects
on the success of a marketing plan.
Programming: In tourism, a travel company serve the customers with a trip (can be
more than 5 days long), so all of events, arrangement need to be scheduled carefully
by the tour organizer. A good tour program which matched with the customer‘s
budget and time helps customer understand about their itinerary and helps company
control well their service. In many cases, customer before arrive Vietnam for instant
do not have a clear plan where to go and what to see…At this time, they need the
advices from the tour sellers. In this case, programming is a very important factor in
the selling process which affects on customer‘s purchasing decision

Packaging: a tour package means the combination of transportation tickets,
accommodation fee, and entrance tickets, guide fees, meals…which to serve tourist
in a trip. Package factor should be included in marketing mix because, customer
always want to book a package with 2 reasons. The first is they do not want to work
with many different providers in one trip. A tour is for the relaxing purpose so
tourists do not want to work and worry about it too much after they book. They just
want to trust one provider and believe it for all the arrangement during their trip in a
curtain region. The second reason is that, buyers and sellers always think that
package price should be cheaper than an individual service price.

However, in this thesis, I just want to go with 7 Ps Marketing mix. Let us discuss
the same in further detail.

8


Figure 1.1: Marketing mix 7P

1.2.1 Product:
The first element in the marketing mix is the product. A product is any combination
of good and service offered to satisfy the needs and wants of consumers. Thus, a
product is anything tangible or intangible that can be offered for purchase or use by
consumers. A tangible product is one that consumers can actually touch, such as a
computer. An intangible product is a service that cannot be touched, such as
computer repair, income tax preparation, or an office call. Other examples of
products include places and ideas. Cities also promote themselves as great places to
live and work. Typically, a product is divided into three basic levels:
The first level is often called the core product, what the consumer actually buys in
terms of benefits. For example, consumers don't just buy a mobile phone, rather,
customers buy the benefit that a mobile phone offer, like being able to access

internet to do many other things, not only call and sending message.
Next is the second level, or actual product, that is built around the core product. The
actual product consists of the brand name, features, packaging, parts, and styling.
These components provided the benefits to consumers that they seek at the first
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level. People want to stay in Sofitel Metropole Hanoi Hotel, not only because of its
room and facility but also by its famous brand.
The final, or third, level of the product is the augmented component. The
augmented component includes additional services and benefits that surround the
first two levels of the product. Examples of augmented product components are
technical assistance in operating the product and service agreements.
Products are classified by how long they can be used—durability—and their
tangibility. Products that can be used repeatedly over a long period of time are
called durable goods. Examples of durable goods include automobiles, furniture,
and houses. By contrast, goods that are normally used or consumed quickly are
called nondurable goods. Some examples of nondurable goods are food, soap, and
soft drinks. In addition, services are activities and benefits that are also involved in
the exchange process but are intangible because they cannot be held or touched.
Examples of intangible services included eye exams and lawyer services.
Another way to categorize products is by their users. Products are classified as
either consumer or industrial goods. Consumer goods are purchased by final
consumers for their personal consumption. Final consumers are sometimes called
end users. The shopping patterns of consumers are also used to classify products.
Products sold to the final consumer are arranged as follows: convenience, shopping,
specialty, and unsought goods. Convenience goods are products and services that
consumers buy frequently and with little effort. Most convenience goods are easily
obtainable and low-priced, items such as bread, candy, milk, and shampoo.
Shopping goods are those products that consumers compare during the selection and
purchase process. Typically, factors such as price, quality, style, and suitability are

used as bases of comparison. With shopping goods, consumers usually take
considerable time and effort in gathering information and making comparisons
among products. Major appliances such as refrigerators and televisions are typical
shopping goods.
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Specialty goods are products with distinctive characteristics or brand identification
for which consumers expend exceptional buying effort. Specialty goods include
specific brands and types of products. Typically, buyers do not compare specialty
goods with other similar products because the products are unique.
Unsought goods are those products or services that consumers are not readily aware
of or do not normally consider buying. Life insurance policies and burial plots are
examples of unsought goods. Often, unsought goods require considerable
promotional efforts on the part of the seller in order to attract the interest of
consumers.
Industrial goods are those products used in the production of other goods. Examples
of industrial goods include accessory equipment, component parts, installations,
operating supplies, raw materials, and services. Accessory equipment refers to
movable items and small office equipment items that never become part of a final
product. Office furniture and fax machines are examples of accessory equipment.
Component parts are products that are turned into a component of the final product
that does not require further processing. Component parts are frequently custom-
made for the final product of which they will become a part. For example, a
computer chip could be produced by one manufacturer for use in computers of other
manufacturers. Installations are capital goods that are usually very expensive but
have a long useful life. Trucks, power generators, and mainframe computers are
examples of installations. Operating supplies are similar to accessory equipment in
that they do not become part of the finished product. Operating supplies include
items necessary to maintain and operate the overall firm, such as cleaners, file
folders, paper, and pens. Raw materials are goods sold in their original form before

being processed for use in other products. Crops, crude oil, iron ore, and logs are
examples of raw materials in need of further processing before being used in
products. The last category of industrial goods is services. Organizations sometimes
require the use of services, just as individuals do. Examples of services sought by
organizations include maintenance and repair and legal counsel.
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The product in service marketing mix is intangible in nature. Like physical products
such as book or a candy, service products cannot be measured. Tourism industry or
the education industry can be an excellent example. At the same time service
products are heterogeneous, perishable and cannot be owned. The service product
thus has to be designed with care. Generally service blue printing is done to define
the service product. For example – a restaurant blue print will be prepared before
establishing a restaurant business. This service blue print defines exactly how the
product (in this case the restaurant) is going to be.
1.2.2 Pricing:
In the earlier times, the price was determined through a barter process between
sellers and purchasers. In modern times, pricing methods and strategies have taken a
number of forms.
Pricing new products and pricing existing products require the use of different
strategies. For example, when pricing a new product, businesses can use either
market – penetration pricing or a price-skimming strategy. A market-penetration
pricing strategy involves establishing a low product price to attract a large number
of customers. By contrast, a price – pricing skimming strategy is used when a high
price is established in order to recover the cost of a now product development as
quickly as possible. Manufacturers of computer, video recorders, and other
technical items with high development cost frequency use a price- skimming
strategy.
Pricing objective are established as a subset of an organization‘ overall objectives.
As a component of the overall business objective, pricing objective is usually take

one of 4 forms:
Profitability, volume, meeting the competition, and prestige.
Profitability pricing objective means that the firm focus mainly on maximizing its
additional revenue equals the increase in product production costs. Using volume
pricing object, a company aims to maximize sales volume within a given specific
profit margin.
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The focus of volume pricing objectives is on increasing sales rather than on an
immediate increasing in profits. Meeting the price level of competitors is another
pricing strategy. With a meeting - the – competition pricing strategy, the focus is
less on price more on non- price competition items such as location and service.
With prestige pricing, product a priced high and consumers purchase them as status
symbols.
In addition to the 4 basic pricing strategies, there are 5 price- adjustment strategy:
discount pricing and allowances, discriminatory price, geographical pricing,
promotional pricing and psychological pricing.
Discount pricing and allowances includes cash discounts, functional discount
seasonal, trade – in allowances and promotional allowances. Discriminatory when
companies sell products or services at 2 or more prices. These price different may
be based on variables such as age of the customers, location of sales, organization,
membership, time of day, or season. Geographical pricing is based on the location
of the customers. Products maybe priced differently in distinct regions of the target
area because of demands differences. Promotional pricing happens when a company
temporarily prices products below the list price or below cost. Products price below
cost are sometime called ―lost leader‖. The goal of promotional pricing is to
increase short – term sales. Psychological pricing considers price by looking at the
psychological aspects of price. For example, consumers frequently perceive a
relationship between product price and product quality.
Pricing in case of services is rather more difficult than in case of products. If you

were a restaurant owner, you can price people only for the food you are serving. But
then who will pay for the nice ambience you have built up for your customers? Who
will pay for the band you have for music? Thus these elements have to be taken into
consideration while costing. Generally service pricing involves taking into
consideration labor, material cost and overhead costs. By adding a profit mark up
you get your final service pricing.
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1.2.3 Promotion:
Promotion is the third element in the marketing mix. Promotion is a communication
process takes place between a business and its various publics. Public are those
individuals and organization that have an interest in what the business produces and
offers for sales. Thus, in order to be effective, business need to plan promotion
activities with the communication process in mind.

Figure 1.2: The element of the communication process


The sender refers to the business that is sending a promotional message to a
potential customer. Encoding involves putting a message or promotional activities
in to some forms. Symbols are formed to represent the message. The sender
transmits the symbol through some forms of media. Media are methods to sender
uses to transmit the message to the receivers. Decoding is the process by which the
receivers translate the meaning of the symbol sent by the sender into a form that can
be understood.
The receiver is the intended recipient of the message. Feedback occurs when the
receiver communication back to the sender. Noise is anything that interferes with
the communication process.
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Noise can be quality of telephone, quality of internet, health status of senders or
receivers…
There are for basic promotion tools (also be called as promotion mix): Advertizing,
Personal selling, Sales promotion and PR.

Figure 1.3: The element of the promotion mix

Each promotion tool has its own unique characteristics and function. For instant,
advertising is described as paid, no personal communication by an organization
using various media to reach its various public. For example, television or radio
advertising.
The purpose of advertising is to inform or persuade a targeted audience to purchase
a product or service, book tour, or adopt an idea. Advertising is also classified as to
its intended purpose. The purpose products advertising are to secure the purchase of
the product by consumers. The purpose of institutional advertising is to promote the
image or philosophy of a company. Advertising can be further divided in to six
subcategories:
Pioneering, competitive, comparative, advocacy, reminder, and cooperative
advertising. Pioneering advertising aims to develop primary demand for the product
or product category. Competitive advertising seeks to develop demand for a specific
15

product or service. Comparative advertising seeks to contrast one product or service
with another. Advocacy advertising is an organizational approach designed to
support socially responsible activities, causes, or messages such as helping feed the
homeless. Reminder advertising seeks to keep a product or company name in the
mind of consumers by its repetitive nature. Cooperative advertising occurs when
wholesalers and retailers work with product manufacturers to produce a single
advertising campaign and share the costs. Example, almost of big hotels in Phu
Quoc co - operate an advertising campaign to attract customers to this island.

They share the cost and intangible and tangible benefits.
Advantages of advertising include the ability to reach a large group or audience at a
relatively low cost per individual contacted. Further, advertising allows
organizations to control the message, which means the message can be adapted to
either a mass or a specific target audience. Disadvantages of advertising include
difficulty in measuring results and the inability to close sales because there is no
personal contact between the organization and consumers.
For example, Hanoi Oasis Hotel advertises on TV, it is easy for them to control the
massage which they want to send to the possible customers but it is very difficult to
calculate the effectiveness of this advertising actions. How many customers come
with them after seeing the advertising on TV? It is very difficult question to the
advertisers.
The second promotional tool is sales promotion. Sales promotions are short-term
incentives used to encourage consumers to purchase a product or service. There are
three basic categories of sales promotion: consumer, trade, and business. Consumer
promotion tools include such items as free samples, coupons, rebates, price packs,
premiums, patronage rewards, point-of-purchase coupons, contests, sweepstakes,
and games. Trade-promotion tools include discounts and allowances directed at
wholesalers and retailers. Business-promotion tools include conventions and trade
shows. Sales promotion has several advantages over other promotional tools in that
it can produce a more immediate consumer response, attract more attention and
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create product awareness, measure the results, and increase short-term sales. For
example, a city hotel normally apply a ―summer promotion‖ for the low season, it
normally lasts 1 month. Some example promotions can be ―Noel promotion‖,
opening promotion‖
Public relation is the third promotional tool. An organization builds positive public
relations with various groups by obtaining favorable publicity, establishing a good
corporate image, and handling or heading off unfavorable rumors, stories, and

events. Organizations have at their disposal a variety of tools, such as press releases,
product publicity, official communications, lobbying, and counseling to develop
image. Public relations tools are effective in developing a positive attitude toward
the organization and can enhance the credibility of a product. Public relations
activities have the drawback that they may not provide an accurate measure of their
influence on sales as they are not directly involved with specific marketing goals.
People said that ―advertising is talk about your self, public relation is to make others
talk about you‖.
Example of ford automobile: Ford is recalling 2,945 Five Hundreds and Mercury
Montegos because of a fuel leak that could result in a fire, according to the National
Highway Traffic Safety Administration.
This event help Ford was more famous and reliable by creating hundreds of article
on public.
The last promotional tool is personal selling. Personal selling involves an
interpersonal influence and information-exchange process. There are seven general
steps in the personal selling process: prospecting and qualifying, pre-approach,
approach, presentation and demonstration, handling objections, closing, and follow-
up. Personal selling does provide a measurement of effectiveness because a more
immediate response is received by the salesperson from the customer. Another
advantage of personal selling is that salespeople can shape the information
presented to fit the needs of the customer. Disadvantages are the high cost per
17

contact and dependence on the ability of the salesperson. This kind of tool is applied
strongly by insurance companies which require much personal contact.
For a promotion to be effective, organizations should blend all four promotion tools
together in order to achieve the promotional mix. The promotional mix can be
influenced by a number of factors, including the product itself, the product life-
cycle stage, and budget. Within the promotional mix there are two promotional
strategies: pull and push.

Pull strategy occurs when the manufacturer tries to establish final consumer demand
and thus pull the product through the wholesalers and retailers. Advertising and
sales promotion are most frequently used in a pulling strategy.
Pushing strategy, in contrast, occurs when a seller tries to develop demand through
incentives to wholesalers and retailers, who in turn place the product in front of
consumers.
Promotions have become a critical factor in the service marketing mix. Services are
easy to be duplicated and hence it is generally the brand which sets a service apart
from its counterpart. You will find a lot of banks and telecom companies promoting
them rigorously. Why is that? It is because competition in this service sector is
generally high and promotions are necessary to survive. Thus banks, IT companies,
and dotcoms place themselves above the rest by advertising or promotions.
1.2.4 Place
The fourth element of the marketing mix is place. Place refers to having the right
product, in the right location, at the right time to be purchased by consumers. This
proper placement of products is done through middle people called the channel of
distribution. The channel of distribution is comprised of interdependent
manufacturers, wholesalers, and retailers. These groups are involved with making a
product or service available for use or consumption. Each participant in the channel
of distribution is concerned with three basic utilities: time, place, and possession.
Time utility refers to having a product available at the time that will satisfy the
needs of consumers. Place utility occurs when a firm provides satisfaction by